Commentary & Deal Flow

CFR CREDIT CLOSE: October Nears Estimate! $4.443bn To Hit; 9-part Tap

     We were told the bulk of this week’s supply would come in pre-Fed, and we’ve definitely seen some action.  Another 8 deals for $12.895bn hit the market today – pushing the week $37.380bn – above the top $35bn estimate.  Meanwhile, October – which was languishing on the 2020-2025 Smallest Months tables through last Friday and nowhere near its estimate – is now at $90.880bn and in need of only $4.443bn to hit the $95.323bn average guess for the month. SO exciting, right?

    On the highlight reel today, Foundry JV Holdco priced at $1.79bn 9-part that consisted entirely of taps.

    The purpose of today’s deal was to permanently extinguish the remaining commitments under the Senior Secured Credit Facilities initially closed in 2022.

    The refinancing was allocated among nine consecutive series maturing from 2030 to 2038 to sculpt a flat Debt Service Coverage Ratio.

    We were pretty confident an All-Tap 9-part had not been seen before. But we went to the tape.

    AT&T came in as the largest multi tranche tap before today – sporting 5 re-opening tranches:

    Interestingly today’s deals moved forward despite the majority of Monday’s supply sitting flat this morning, with some +1bp to +3bp wide of new issue.

    There was one stand down this morning, which we understand will look again Thursday.

    The Fed meeting should hold off issuance on Wednesday.

Other notables today:

Two bank deals today from RBC and LLOYDS made some notables.

RY priced as the 2nd lowest spread for a 3nc2 looking back through 2022.

RY's 6nc5 T+70 was good for the top 5 looking back through 2022.

On low coupons, RY tops 3nc2 coupons looking back through 2023:

And gets 2nd in 6nc5s through 2023 with LLOYDS not too far behind:

Following HCA's BBB 10y yesterday, TXT also ranks for low BBB 10y coupons:

HERE'S TODAY'S RUNDOWN:

[LLOYDS BANKING GROUP] 

Lloyds Banking Group PLC (LLOYDS), issuer ratings A3/A-/A+ (s/s/s), US$3.05bn SEC registered 3-part global senior unsecured notes. 6nc5 FRR/FRN due 11/4/31 (optional redemption date 11/4/30); 11nc10 FRR due 11/4/36 (optional redemption date 11/4/35).  Par Call: 1 year(s) prior to maturity or upon the occurrence of a Loss Absorption Disqualification Event (any time) or a certain tax event (any time). Fixed rate reset coupon: 1-yr U.S. Treasury Rate + bps during the Reset Fixed Rate Period.  Business Day Convention: FRR: Following, Unadjusted; FRN: Modified Following, Adjusted.  Exchange: NYSE. Governing Law: The Indenture and the Senior Notes are governed by, and construed in accordance with, the laws of the State of New York except that the provisions relating to the waiver of set-off are governed by and construed in accordance with Scots law. UK Bail-in: Applicable. Denoms: 200,000 x 1,000. UOP: gcp. Pricing 10/28. Settle 11/04 (T+5).  6nc5 FRR: CUSIP 53944Y BD4; ISIN US53944YBD40; 6nc5 FRN: CUSIP 53944Y BF9; ISIN US53944YBF97; 11nc10 FRR: CUSIP 53944Y BE2; ISIN US53944YBE23.

VIA LLOYDS (B&D)/BARC/JPM/SCOTIA/SCHART/WFC.

Announced overnight as benchmark, final size came in at $3.05bn with price compression as follows:

- 6nc5 FRN – IPT Seqv; GDNC Seqv; PXD $300m FRN 11/4/31 SOFR+110 at 100.
- 6nc5 FRR – IPT 110a; GDNC 82#; PXD $1.5bn 4.425% 11/4/31 100.00 4.425% T+82.
- 11nc10 FRR – IPT 125-130a; GDNC 97#; PXD $1.25bn 4.943% 11/4/36 100.00 4.943% T+97.

As for r/v, outstanding LLOYDS was quoted as follows:

- LLOYDS 4.818% due 06/13/29 (nc 28) T+62bp (G62; $101.70) - $1.25bn pxd 6/10/25 +83
- LLOYDS 5.721% due 06/05/30 (nc 29) T+59bp (G66; $105.01) - $1.50bn pxd MAY 2024
- LLOYDS 5.590% due 11/26/35 (nc 34) T+89bp (G95; $105.19) - $1.00bn pxd NOV 2024
Lloyds Banking Group Sub (Baa1/BBB/A-)
- LLOYDS 6.068% due 06/13/36 (nc 35) T+127bp (G128; $106.08) - $1.25bn pxd 6/10/25 +160

* 11NC10 - LLOYDS NOV 35nc34 G95; + 2bp curve = T+97bp.  At the T+97bp pricing level, 11NC10 CONCESSION IS FLAT

* 6NC5: - 11nc10 f/v T+97bp minus 15bp 6nc5/11nc10 curve at IPT = T+82bp.  At the T+82bp pricing level, 6NC5 CONCESSION IS FLAT.

Comps away:

HSBC Holding PLC (A3/A-A+)
- HSBC 5.240% due 05/13/31 (nc 30) T+81bp (G83; $103.32) - $2.25bn pxd 5/8/25 +125
- HSBC 5.790% due 05/13/36 (nc 35) T+97bp (G99; $106.28) - $2.00bn pxd 5/8/25 +140

NatWest Group PLC (A3/A-/A+)
- NWG 5.115% due 05/23/31 (nc 30) T+76bp (G78; $103.05) - $1.25bn pxd 5/20/25 +105
- NWG 5.778% due 03/01/35 (nc 34) T+84bp (G94; $106.49) - $1.5bn pxd FEB 2024

FINAL BOOKS:

$300m 6nc5 FRN - $775m (2.58x) – PEAK $1.100BN

$1.5bn 6nc5 FRR - $5.8bn (3.87x) – PEAK $6.500BN
$1.25bn 11nc10 FRR - $2.6bn (2.08x) – PEAK $6.600BN

[ROYAL BANK OF CANADA] 

Royal Bank of Canada (RY) exp. security ratings A1/A/AA-/AA (Moody's/S&P/Fitch/DBRS) (s/s/s/s), issuer ratings Aa1/AA-/AA/AA(high), $2.25bn SEC-registered senior unsecured 3-part (3nc2 fixed to float due 11/03/28, 3nc2 FRN due due 11/03/28, 6nc5 fixed to float due 11/03/31). FRN Calculation: USD Compounded SOFR Index. Optional Redemption: MWC on FTFs. Par Call on all tranche: 1 year prior to maturity, beginning 1mo prior to maturity. UoP: GCP. Sale into Canada: Yes - Exemption. Denoms: 2k x 1k.

3nc2 FTF: Cusip: 78017DAN8. ISIN: US78017DAN84.

3nc2 FRN: Cusip: 78017DAP3. ISIN: US78017DAP33.

6nc5 FTF: Cusip: 78017DAQ1. ISIN: US78017DAQ16.

6nc5 FRN: Cusip: 78017DAR9. ISIN: US78017DAR98.

Price 10/28. Settle 11/03 (T+4)

VIA active bookrunners: RBCCM(B&D), FITB, GS, KEY, Santander, StanChart.

Today’s deal was announced as a benchmark 4-pt (with a 6nc5 FRN that was dropped at guidance), final size came in at $2.25bn with price progression as follows:

- 3nc2 FRN – IPT Seqv; GDNC S+70#; PXD $500m FRN 11/3/28 SOFR+70 at 100.
- 3nc2 FTF – IPT T+70a; GDNC T+50#; PXD $750m 3.995% 11/3/28 100.00 3.995% T+50. MW+10. Back-end SOFR+70.0
- 6nc5 FTF – IPT 90a; GDNC T+70#; PXD $1bn 4.305% 11/3/31 100.00 4.305% T+70. MW+15. Back-end SOFR+98.0.

As for r/v, outstanding RY was quoted as follows:

 - RY 4.715% due 03/27/28 (nc 27) T+45bp (G41; $101.05) - $1bn pxd 3/24/25 +68
- RY 4.522% due 10/18/28 (nc 27) T+46bp (G46; $101.06) - $850m pxd OCT 2024
- RY 4.696% due 08/06/31 (nc 30) T+62bp (G63; $102.00) - $1.00bn pxd 7/28/25

* 6nc5: Aug 31nc30 G63; Call f/v T+64bp?  At the T+70bp pricing level, 6NC5 CONCESSION IS 6BP.

* 3nc2: Rolled down OCT 28nc27 G46 = F/V T+46bp; Or 6nc5 f/v T+64bp minus 20bp 2s/5s = T+44bp.  Going mid-point f/v is T+45bp.  At the T+50bp pricing level, 3NC2 CONCESSION IS 5PB.

FINAL BOOKS:

$500m 3nc2 FRN - $790m (1.58x) – PEAK $900M
$750m 3nc2 FTF - $1.3bn (1.73x) – PEAK $1.500BN
$1.0bn 6nc5 FTF - $2.10bn (2.10x) – PEAK $2.600BN

[MEITUAN] 

Meituan (MEITUA) exp Baa1/A-/BBB+ (s/s/s) US$2bn 144A/Reg S (Cat 2) 3-part sr notes (5.5y, 7y, 10y). MWC then 1mo par call on 5.5y, 2mos on 7y and 3mos on 10y. Denoms: 200k x 1k. Law: New York law. Listing: Hong Kong. UOP: Refinancing of existing offshore indebtedness and other general corporate purposes. Marketing: www.netroadshow.com | Entry code: MeituanUSD2025 (not case-sensitive) or direct link: www.netroadshow.com/nrs/home/#!/?show=84f0fcba (recommended). Pricing 10/28. Settle 11/5 (T+5). 

VIA BofA (B&D)/GS (Asia)/CITIC Secs as JGCs/JLMs/JBRs / China Intl Cap Corp as JLM/JBR.

Announced overnight with benchmark size, final size came in at $2bn with price progression as follows:

- 5.5yr – IPT 130a; FPG 95#; PXD $600m 4.500% 5/5/31 99.649 4.573% T+95. MW+15.
- 7yr – IPT 140a; FPG 105#; PXD $600m 4.750% 11/5/32 99.471 4.840% T+105. MW+20.
- 10yr – IPT 150a; FPG 115#; PXD $800m 5.125% 11/5/35 99.876 5.141% T+115. MW+20.

  As for r/v, outstanding MEITUA was quoted as follows:

 - MEITUA 4.500% due 04/2/28 T+86bp (G86; $100.31) - $1.2bn pxd SEPT 2024
  - MEITUA 4.625% due 10/02/29 T+85bp (G91; $100.58) - $1.3bn pxd SEPT 2024
  - MEITUA 3.050% due 10/28/30 T+85bp (G85; $93.74) - $1.25bn pxd OCT 2020

  * 5.5yr -  Focusing on the Oct ‘29s (G91); adding in 4bp curve for the L5yr puts f/v at T+95bp.  At the T+95bp pricing level, 5.5YR CONCESSION IS FLAT.

  * 7yr – L5yr f/v T+95bp - + 10bp 5.5yr/7yr curve at IPT = T+105bp.  At the T+105bp pricing level, 7YR CONCESSION IS FLAT.
  * 10yr – 7yr f/v T+105bp + 10bp 7s/10s at IPT = T+115bp.  At the T+115bp pricing level, 10YR CONCESSION IS FLAT.

 FINAL BOOKS: 

$600m 5yr - $3.60bn (6.00x)
$600m 7yr - $3.10bn (5.17x)
$800m 10yr - $5.00bn (6.25x)

We didn’t catch peaks on this one. 

[FOUNDRY JV HOLDCO] 

Foundry JV Holdco LLC (Baa2/BBB/BBB (s/s/n) “FABSJV” US$1.79bn 144A no reg rights 9-part senior secured notes. CoC at 101. denoms: 200,000 x 1,000. Sales into Canada: Yes - Wrapper. UOP: (i) for the Refinancing (including for the Senior Credit Facility Cancellation and Payoff), (ii) to fund our pro rata share of certain budgeted capital calls, (iii) to make certain permitted investments, including with funds that will be applied towards budgeted capital calls and interest and fees on the notes and certain other indebtedness, (iv) to pay transaction costs, fees and expenses related to the Refinancing and the issuance of the new notes and to pay certain costs and expenses related to Arizona Fab, (v) to pay interest and fees on the notes and certain other indebtedness, (vi) pay fees, costs and expenses relating to equity support letters of credit and (vii) to fund or credit amounts to the Term Deposit Account. Special Redemption: Upon Brookfield’s receipt of net cash proceeds from a sale of equity interests in Arizona Fab in connection with an Intel Call Right or a Brookfield Default Call, within ten (10) business days of receiving such net cash proceeds, Brookfield will apply such net cash proceeds to the greater of (i) the Target Debt Balance Payment Amount and (ii) the amount required pursuant to the LLC Agreement for Brookfield to comply with its obligations to discharge indebtedness in connection with such Intel Call Right or Brookfield Default Call plus a “modified make-whole” premium, plus accrued and unpaid interest, if any, to but excluding the redemption date. In the case of a sale of all equity interests owned by Brookfield in Arizona Fab, Brookfield will redeem the principal amount of the notes in full, plus a “modified make-whole” premium, plus any accrued and unpaid interest thereon to but excluding the date of redemption. Marketing: www.netroadshow.com Passcode: FABSJV2025. Pricing 10/28. Settle 10/31 (T+3).

VIA BNP (B&D on 30s/31s/32s/33s)/WFS (B&D on 34s/35s/36s/37s/38s) joint active books. Passive: Academy/BMO/Brookfield/CIBC/Commerz/Miz/NatWest/RBC/Sant/Scotia/SG/SMBC/TD. Sr Co-Mgrrs: ANZ Securities, BBVA, Desjardins, ING, NBCF, StanChart, TSI. 

Announced with benchmark size, final size came in at $1.79bn with price progression as follows:

30s IPTs T+105 area; STL T+82; PXD $240m 5.900% 1/25/30 105.509 4.431% T+82. MW+25. Total outstanding now $1.09bn

31s IPTs T+115 area; STL T+90; PXD $155m 5.500% 1/25/31 104.496 4.511% T+90. MW+20. Total outstanding now $1.155bn

32s IPTs T+120 area; STL T+100; PXD $215m 6.150% 1/25/32 107.144 4.779% T+100. MW+25. Total outstanding now $1.215bn

33s IPTs T+135 area; STL T+105; PXD $140m 5.900% 1/25/33 106.345. 4.829% T+105. MW+25. Total outstanding now $1.29bn

34s IPTs T+145 area; STL T+120; PXD $265m 5.875% 1/25/34 104.474. 5.183% T+120. MW+40. Total outstanding now $1.365bn

35s IPTs T+145 area; STL T+115; PXD $245m 6.250% 1/25/35 107.955 5.133% T+115. MW+30. Total outstanding now $1.445bn

36s IPTs T+150 area; STL T+117; PXD $145m 6.100% 1/25/36 107.314. 5.153% T+117. MW+25. Total outstanding now $1.535bn

37s IPTs T+155 area; STL T+122; PXD $155m 6.200% 1/25/37 108.258 5.203% T+122  MW+30. Total outstanding now $1.63bn

38s IPTs T+160 area; STL T+132; PXD $230m 6.400% 1/25/38 109.633 5.303%  T+132. MW+30. Total outstanding now $1.03bn

As for r/v, outstanding FABSJV was quoted as follows:

-FABSJV 5.900% due 01/25/30 T+79bp (G82; $105.65) - $850m pxd MAY 2024

*** 2030: f/v at T+79bp. At the T+82bp pricing level, 2030 CONCESSION IS 3BP.

-FABSJV 5.500% due 01/25/31 T+93bp (G91; $104.39) - $1bn pxd FEB 2025

*** 2031: f/v at T+93bp. At the T+90bp pricing level, 2031 CONCESSION IS NEG 3BP.

-FABSJV 6.150% due 01/25/32 T+94bp (G101; $107.51) - $1bn pxd MAY 2024

*** 2032: f/v at T+94bp. At the T+100bp pricing level, 2032 CONCESSION IS 6BP.

-FABSJV 5.900% due 01/25/33 T+112bp (G111; 105.98) - $1.15bn pxd FEB 2025

*** 2033: f/v at T+112bp. AT the T+105bp pricing level, 2033 CONCESSION IS NEG 7BP.

-FABSJV 5.875% due 01/25/34 T+115bp (G128; 104.88) - $1.1bn pxd MAY 2023

*** 2034: f/v at T+115bp. At the T+120bp pricing level, 2034 CONCESSION IS 5BP.

-FABSJV 6.250% due 01/25/35 T+117bp (G123; 107.89) - $1.2bn pxd MAY 2024

*** 2035: f/v at T+117bp. At the T+115bp pricing level, 2035 CONCESSION IS NEG 2BP.

-FABSJV 6.100% due 01/25/36 T+118bp (G117; 107.32) - $1.39bn pxd FEB 2025

*** 2036: f/v at T+118bp. At the T+117bp pricing level, 2036 CONCESSION IS NEG 1BP.

- FABSJV 6.200% due 01/25/37 T+128bp (G122; 107.84) - $1.475bn pxd FEB 2025

*** 2037: f/v at T+128bp. At the T+122bp pricing level, 2037 CONCESSION IS NEG 6BP.

- FABSJV 6.400% due 01/25/38 T+135bp (G123; 109.49) - $800m pxd MAY 2024

*** 2038: f/v at T+135bp. AT the T+132bp pricing level, 2038 CONCESSION IS NEG 3BP.

FINAL BOOKS:

$240m 2030 - $680m (2.83x) - PEAK $965m 

$155m 2031 - $485m (3.13x) - PEAK $1.100bn

$215m 2032 - $910m (4.23x) - PEAK $780m

$140m 2033 - $600m (4.29x) - PEAK $1.400bn

$265m 2034 - $900m (3.40x) - PEAK $1.250bn

$245m 2035 - $1.050bn (4.29x) - PEAK $2.000bn

$145m 2036 - $1.050bn (7.24x) - PEAK $2.350bn

$155m 2037 - $715m (4.61x) - PEAK $2.150bn

$230m 2038 - $740m (3.22x) - PEAK $1.750bn

[BLACKSTONE REG FINANCE CO LLC] 

Blackstone Reg Finance Co. L.L.C. (BX) exp A+/A+ (s/s) by S&P and Fitch US$1.2bn  SEC registered 2-pt sr notes (5y FXD due 11/3/30 and L10y FXD due 2/15/36). MWC then 1mo on 5y and 3mos on L10y. CoC at 101. Guarantors: Blackstone Inc., Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. Denoms: 2,000 x 1,000. Sales into Canada: yes via exemption. Marketing: www.netroadshow.com/nrs/home/#!/?show=78b067fc or www.netroadshow.com // BX2025. UOP: gcp. Pricing 10/28. Settle 11/3 (T+4). IPTs: 5y T+105 area, L10y T+125 area.

VIA BofA (B&D)/Citi/DB/MS/RBC joint active books.

Announced as benchmark, final size came in at $1.2bn with price progression as follows:

- 5yr – IPT 105a; GDNC 73#; PXD $600m 4.300% 11/3/30 99.817 4.341% T+73

- L10yr – IPT 125a; GDNC 98#; PXD $600m 4.950% 2/15/36 99.904 4.963% T+98

As for r/v, outstanding BX was quoted as follows:

- BX 1.625% due 08/05/28 T+51bp (G51; $93.82) - $650m pxd JUL 2021
- BX 2.550% due 03/30/32 T+58bp (G82; $88.93) - $500m pxd JAN 2022
- BX 5.000% due 12/06/34 T+80bp (G87; $101.58) - $750m pxd DEC 2024
- BX 3.200% due 01/30/52 T+80bp ($69.88) - $1.0bn pxd JAN 2022

* 5YR – f/v on the 5yr was pegged at T+72.5bp (with the 105a IPT essentially 30-35bp back; ‘32s G82 minus 10ish).  At the T+73bp landing level, 5YR CONCESSION IS FLAT.

* L10yr – f/v on this tranche was pegged at T+92.5bp (with the 125a IPT essentially 30-35bp back; Dec ‘34s G87 + 5bp curve)  At the T+98bp pricing level, L10YR CONCESSION IS 5BP.

Comps away:

KKR & Co (NR/A/A)
- KKR 5.100% due 08/07/35 T+106bp (G108; $100.46) - $900m pxd 8/4/25 +93

Apollo Global Management (A2/A/A)
- APO 5.150% due 08/12/35 T+103bp (G105; $101.07) - $500m pxd 8/7/25 +95

The Carlyle Group (NR/A-/A-)
- CG 5.050% due 09/19/35 T+108bp (G108; $99.93) - $800m pxd 9/16/25 +105

TPG Operating Group II (A3/BBB+/A-)
- TPG 5.375% due 01/15/36 T+125bp (G124; $101.13) - $500m pxd 8/11/25 +120

FINAL BOOKS:

$600m 5yr - $2.00bn (3.33x) – PEAK $2.800BN
$600m 10yr - $2.100bn (3.50x) – PEAK $3.000BN

[FORD MOTOR CREDIT] 

Ford Motor Credit Co LLC ( F ) exp Ba1/BBB-/BBB- (s/n/s) US$1bn SEC registered 10y sr notes due 10/31/35. MWC then 3mos par call. JPM/Miz/MS (B&D)/RBC/TSI joint active books. Denoms: 200,000 x 1,000. Sales into Canada: no. UOP: gcp. Pricing 10/28. Settle 10/31 (T+3). CUSIP/ISIN: 345397H89 / US345397H899. IPTs: T+215 area.

VIA JPM/Miz/MS (B&D)/RBC/TSI joint active books.

Announced with benchmark size, we heard initial thoughts as T+215a.

Guidance came in at 188#.

Ultimately, a $1bn deal priced as follows:

PRICED: $1bn 5.869% 10/31/35 100.00 5.869% T+188. MW+30.

As for r/v, outstanding Ford was quoted as follows:

- F 6.500% due 02/07/35 T+182bp (G188; $104.86) - $1.25bn pxd 1/2/25 +193

* Outstanding Feb ‘35s G188;  Adding 2bp for curve puts f/v at T+190bp.  However, many have been adding no curve for this differential.  Call f/v T+188 to 190 (mid 189), CONCESSION IS NEG 1BP.

FINAL BOOK:

$1bn 10yr - $1.82bn (1.82x) – PEAK $4.500BN 

[TEXTRON INC] 

Textron Inc exp Baa2/BBB (p/s) US$500m (no grow) SEC registered L10y sr notes due 3/15/36. MWC then 3mos par call. CoC at 101.Sr Co-Mgr: PNC. Co-mgr: BNY, Loop. UOP: Net proceeds will be used for general corporate purposes, including the redemption or repayment of the $350 million outstanding 4.000% notes due March 15, 2026. Denoms: 2,000 x 1,000. Sales into Canada: yes via exemption. Marketing: https://dealroadshow.com/e/TEXTRON25 Passcode: TEXTRON25. CUSIP: 883203CF6. Pricing 10/28. Settle 10/31 (T+3).

VIA GS/JPM/WFS (B&D) joint active books. Passives: SMBC/MUFG/USB.

Announced as $500m no grow, we heard initial thoughts as T+125 area

Went straight to launch at T+97.

Ultimately, a $500m deal priced as follows:

$500m 4.950% 3/15/36 99.981. 4.953% T+97. MW+15.

As for r/v, outstanding TXT was quoted as follows:

-TXT 5.50% 5/15/35 T+91bp (G94; $104.58) - $500m pxd FEB 2025

*** May ‘35 G94, add 2bp for ‘35/’36 curve gets f/v to T+96bp. At the T+97bp pricing level, CONCESSION IS 1BP.

 COMPS AWAY:

General Dynamics Corp (A2/A)
-GD 4.950% 8/15/35 T+56bp (G58; $103.14) - $750m pxd APRL 2025

Lockhead Martin Corp(A2/A-/A)
-LMT 5.000% 8/15/35 T+61bp (G63; $103.13) - $750m pxd 07/23/25 +65

Northrop Grumman Corp (A3/BBB+/BBB+)
-NOC 5.250% 7/15/35 T+63bp (G65; $104.85) - $500m pxd MAY 2025

RTX Corp (Baa1/BBB+)
-RTX 6.100% 3/15/34 T+52bp (G64; $110.79) - $1.5bn pxd NOV 2023

L3 Harris Tech Inc (Baa2/BBB/BBB+)
-LHX 5.350% 6/01/34 T+68bp (G78; $104.72) - $750m pxd MAR 2024

Huntington Ingalls (Baa3/BBB-/BBB)
-HII 5.749% 1/15/35 T+93bp (G99; $106.03) - $500m pxd NOV 2024

FINAL BOOK:

$500m L10yr - $1.800bn (3.60x) - PEAK $2.900bn

[AMERICAN AIRLINES] 

Also adding to today’s total was the first EETC priced in 2025 - American Airlines 2025-1 EETC. 

The last time we show an EETC pricing was United Airlines on 7/22/24. 

American Airlines 2025-1 EETC (AAL) $1.105bn SEC registered 12.5y (8.7y WAL) and 9y (6y WAL)  EETC Pass Through Certificates Series 2025-1. BNP/DB/JPM (B&D) joint active books. Structuring agents; DB/JPM. Liquidity Provider: 3 semi-annual interest payments, provided by Natixis. Cross Collateralizations: Yes. Cross Defaults: Yes. Waterfall: Interest of the B Pool Balance is paid ahead of principal on the Class A Certificates. Depository: Proceeds from the issuance will be held in escrow with the Depositary and withdrawn to purchase equipment notes as the aircraft are financed (SMBC through their NY branch). Collateral: 2x Airbus A321 XLR, 12x Boeing 737 MAX 8, 3x Boeing 787-9, 8x Embraer ERJ 175 LR. Denoms: 2,000 x 1,000. Sales into Canada: yes via exemption. 

UOP: To finance the delivery of 25 collateral aircraft, to pay fees and expenses related to this offering, and for general corporate purposes. Pricing 10/28. Settle 11/12 (T+10). 

-US$883.620m Class A. Exp A+/A- by S&P and Fitch. Exp distribution: 5/11/38. Legal distribution: 11/11/39. 12.5y tenor. 8.7y avg life. 58.0% / 58.0% Initial/Max LTV.
IPTs: 5.25% area  (8.7yr WAL G+ ~135 )

LAUNCH:  $883,625m Class A 12.5y at 4.90%  (8.7yr WAL G + ~100).
PRICED: $883,625m Class A 4.900% 100.00 4.90%. T+99.3. MW+15.

-US$220,909m Class B. Exp BBB/BBB- by S&P and Fitch. Exp distribution: 11/11/34. Legal distribution: 5/11/36. 9y tenor. 6y avg life. 72.5%/72.5% Initial/Max LTV.
IPTs:  6.00-6.125% (6.0yr WAL G+ ~237.5)

 LAUNCHED: $220,909m Class B 9y at 5.65%  (6.0yr WAL G + ~195).

 PRICED: $220,909m Class B 5.650% 100.00 5.65%. T+194.7. MW+30.

FINAL BOOKS:

$883,625m 12.5y (8.7 WAL) - $4.400bn (4.98x) - PEAK $6.150bn

$220,909m 9y (6y WAL) - $1.700bn (7.70x) - PEAK $2.000bn

[M&A TODAY]

Skyworks Solutions Inc "SWKS" (Ba1/BBB-/BBB+) entered an agreement to acquire Qorvo Inc "QRVO" (Ba1/BBB-/BBB+) in a stock and cash deal. Qorvo shareholders will recieve $32.50 in cash and 0.960 in Skyworks stock per share which values QRVO around $105 per share or around $10bn.

The combined company will have an enterprise value of $22bn. At closing, Skyworks will own apprixmatley 63% and Qorvo will own approximatley 37%.

Skyworks plans on funding the cash portion with cash on hand and new debt and has obtained a $3.05bn bridge facility with GS. SWKS last issued a $1.5bn deal in May 2021 for their $2.75bn acquisition of Silicon Lab's Infrastructure & Automotive business.

The transaction is expected to close by Q1 2027.

Qatalyst Partners and Goldman Sachs are the financial advisors with Skadden, Arps, Slate, Meagher & Flom LLP providing legal counsel to Skyworks.

Centerview Partners is the financial advisor with Davis Polk & Wardwell LLP providing legal counsel to Qorvo.